Clothing Catalog Creates New Patterns

Firm Gives Support To Working Parents, Schools, Community

June 26, 1995|By Barbara Sullivan, Tribune Staff Writer.

Gun Denhart and her husband, Tom, broke all the rules when they began their own business 12 years ago.

Without knowing anything about mail order or the children's clothing industry, they quit their steady-paycheck corporate jobs, sold their house and used half the proceeds to start a catalog business selling colorful, all-cotton clothes for children.

Topping off the dramatic life change, they used the balance of their house assets to move across country, from New York to Portland, Ore., where Tom Denhart previously lived. His wife had moved to the U.S. from Sweden in 1975, after they met and married.

"We did have focus groups," Gun Denhart said during a recent stop in Chicago. "Before we moved, we showed the clothing we were going to sell to our friends, and asked what they thought. Very scientific.

"A financial adviser, if we'd had one, would not have approved."

They named their new mail-order company Hanna Andersson, after Gun Denhart's Swedish grandmother-easier for people to remember, she said, than her own name. In February 1984, they mailed 25,000 copies of their first catalog. Over the next few months, they received $53,000 in orders from about 1,000 customers.

"One of the things I'll never forget was the day I went out to the mailbox and our first order was there-with a check. We packed them (orders) up just like you do when you mail to friends-at the kitchen table," Denhart recalled.

Last year, 13 million catalogs were mailed and Hanna Andersson chalked up about $47 million in sales.

And the company is now opening its first retail stores. One is scheduled to open July 1 in White Plains, N.Y., and a second will open around Aug. 1 at an outlet mall in Michigan City, Ind., called Lighthouse Place.

The company also is scheduled to have an order-taking phone center in Tokyo by the beginning of July.

Hanna Andersson has been a unique success story-though, like all mail-order companies, its profits are now being pinched by rising paper and postage costs-but the success Gun Denhart likes to talk about is what she calls the "double bottom line."

One bottom line is money-what the company makes. The other is social-what the company is able to do for its employees and community.

And much of what Hanna does for its employees and community is child-oriented, reflecting its product line.

The company pays 45 percent of the day-care costs incurred by employees for their children. And no, Denhart said, employees without children don't get any equivalent benefit. "Children are the ones who are going to grow up; they're everyone's children," she said.

In a program called Cash for Kids, Hanna gives each school-age child of employees a $100 check made out to the child's school for use in the child's classroom. Last year, Hanna's 300 employees had 160 school-age children, for a total of $16,000. Twenty other Portland-area companies have followed suit and are making similiar contributions.

A flexible time-off program gives employees up to 33 days off, depending on length of service, which is measured in hours and thus can be used for everything from staying home with a sick child or going on a two-week vacation.

"Parents shouldn't have to lie, shouldn't have to call in sick, if they want to go to a school play," Denhart said.

Customers whose children outgrow their Hanna clothes are encouraged to send the used clothes back. They get a 20 percent credit toward their next purchase, and Hanna gives the used clothing-called Hannadowns-to non-profit organizations throughout the country. Since 1992, customers have gotten $1 million in credit and 340,000 articles of used clothing have been donated.

And finally, Hanna gives 5 percent of its pre-tax profits to a shelter for victims of domestic violence, a school for homeless children and a program for teenage parents.

Given the roots of Hanna Andersson, this social consciousness was a natural way to go, Denhart said.

Back in the early days of the Denhart marriage, she had turned down a full-time job because it would have meant leaving the house before her 9-year-old son (from a first marriage) left for school. Instead, she kept her part-time job with flexible hours.

And her husband, who created the advertising campaign of "Don't Leave Home Without It" for American Express, was chafing at a two-hour-plus commute that ate into his family time.

So when they started their company, with Gun as president and Tom as creative director, it was with the recognition that the personal lives of employees deserved recognition and flexibility in the workplace.

Just as the desire to start their own company was closely linked with the need to balance work and family, the actual creation of Hanna Andersson was the direct result of family.

They had considered selling Swedish bottled water and Swedish pre-manufactured houses-she wanted a business reason to occasionally return home-but nothing clicked until their son, Christian, was born in 1980.

American friends and neighbors loved the soft cotton, brightly colored clothes that the Denharts got for their new baby from Sweden. The idea for Hanna Andersson was born.

"We had in mind that we would spend $250,000 and if we went over that, we'd have to do something else. Tom wanted to go back to Portland, and we were able to buy twice the house for half the money there, so we had this money. We were in the black the second year," she said.

Right now, Hanna is at a crossroads.

Competition in the children's clothing industry has increased and paper and postage costs are continuing to eat into profits.

"These are tough years for catalog businesses," Denhart said. "We've had some real good years, which is why we've been able to stay private. All mail-order companies are talking about other ways to grow. For us, the retail route and selling abroad is a good strategy.